Q.    My Wife and I both come from generous families and have received cash gifts during our marriage.  Mostly we have saved the gifts for a rainy day. We each maintained separate investment accounts and when gifts came in we placed them in our individual accounts initially.  I often used the gifts from my family to take the family on a really nice summer vacation. My parents wanted to know we enjoyed the money and they always made family vacations a priority.

My Wife never used the money instead saying she was saving it so we could retire earlier.  Now we are getting divorced. I have been ordered to pay all of the family bills and move out.  I had to dip into my account to help cover costs. My Wife started diverting her income to her individual account.  Now we are stuck on the asset division.

My Wife thinks because she didn’t merge her gifts in with the family finances she can keep them.  She also says I have to divide mine equally because I used mine to support the family lifestyle. This just feels wrong to me.  Is she right?

A.    Your wife wants to have her cake and eat it too.

In Massachusetts, gifted and inherited property is considered part of the marital assets and a judge can order the gift divided or transferred between parties.  There are a number of factors judges consider in deciding how to divide marital assets. The most critical factors when it comes to whether or not to divide gifts or, if so, how, are the length of marriage, contributions to the marital estate by each party, needs of the parties, and opportunity to acquire future capital assets.  As a practical matter, most judges also consider when the gift was received and to what use it was put.

Your wife clearly has some understanding of how this works when she tells you that you used your gift account to support the family thus weaving it into the fabric of the marriage.  She, on the other hand kept her gift account separate and apart and never drew down on it to support the family. She thinks she is safe but your Wife made one calculated error.

In her greedy attempt to stash away her income during this process, she commingled her gifts with her earned income.  Without question her income is a part of the marital estate subject to allocation in a support order and division in an asset split to the extent saved.  By commingling the funds, she ensured her gifts are also ripe for the picking in the asset division.